GBP/JPY slides to fresh 6.5-week low as the S&P 500 futures resume slide

The GBP/JPY pair fell to 143.88 in Asia, the lowest level since Sept. 10.
Down 0.74 percent at press time, the S&P 500 futures are likely pushing the anti-risk JPY higher across the board.
The GBP/JPY cross looks set to test 143.65 (61.8% Fib R of 139.90/149.72).

Omkar Godbole FXStreet Contributor

The GBP/JPY pair fell to a 6.5-week low of 143.88 in Asia and could drop further to 143.65 (61.8% Fib) in Europe, as the S&P 500 futures are indicating that risk aversion is unlikely to abate.

At press time, the JPY cross is trading just below 144.00 and the S&P 500 futures are reporting a 0.75 percent drop.

The blue-chip index posted gains yesterday, however, the relief could be short-lived, as indicated by the losses in the S&P 500 futures

Focus on S&P 500's weekly close

The risk aversion may worsen next week, sending the GBP/JPY well below 143.65 (61.8% Fib), if the S&P 500 closes today below the 50-week exponential moving average (EMA) support of 2,731.

What's more, the GBP side of the story is also looking weak as the chances of a no-deal Brexit outcome are rising. The 5-day and 10-day EMAs are trending south, in favor of the bears. So, it seems safe to say that for GBP/JPY, the path of least resistance is on the downside.

GBP/JPY Technical Levels

Resistance: 144.10 (support of Oct. 24 low on the hourly chart), 144.77 (50-hour EMA), 145.00 (psychological hurdle)

Support: 143.65 (61.8% Fib R of 139.90/149.72), 142.59 (Sept. 4 low), 142.21 (76.4% Fib R of 139.90/149.72)

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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